Lake Shore Bancorp, the parent company of Lake Shore Savings Bank, reported a 14 percent increase in its third-quarter net income from a year ago, to $986,000.
The Dunkirk-based bank’s net interest income from making loans and taking deposits was $3.7 million, up about 2 percent from a year earlier. Its non-interest income from sources such as fees rose 7 percent from the third quarter of 2012, to $541,000.
Daniel P. Reininga, president and chief executive officer of Lake Shore, said the bank managed to increase its net interest margin to 3.3 percent, an improvement of 15 basis points, despite “sluggish economic activity across upstate New York, the continuation of a low interest rate environment and increased regulatory burdens.”
The bank did so by reducing its dependence on more costly CDs and borrowings, “while continuing to effectively manage our funding base,” he said.
Net interest margin reflects the difference between interest earned on loans and investments, and the interest paid out on deposits and borrowings.
Lake Shore’s non-interest expense increased 4.8 percent from a year ago, primarily due to higher occupancy and equipment costs stemming from the opening of a branch in Snyder last April.
Lake Shore has 11 branches in Western New York. In Erie and Niagara counties, it ranked 10th in deposit market share as of June 30, with 0.54 percent, according to Federal Deposit Insurance Corp. data.